The First Step towards Market Segmentation

First, you must know that what is the meaning of market segmentation. In the simplest of terms, we must first divide the phrase that we have at hand. First, we get market and second, we get segmentation. Market refers to wide area where your products are being sold. This does not mean just a geographical location where your items are sold. It means the market at large where there are your competitors as well. Your market may be local, national or even international. It all depends on your scale of production and distribution channels that you use. On the other hand, segmentation refers to the sectors and basis on which we divide this market. Keep reading ahead to know the four basic ways in which the first step of market segmentation is done.

Geographical: This refers to the location. Your scale of operations can be local, regional, national and international. You need to be clear about this because accordingly you will have to plan out your production so that the demands of the masses can be met. In fact, this is also vital for you so that you can effectively decide the type of marketing channels that you will use. The orthodox channels of advertisement are the TV, the radio and the newspaper. The modern marketing means are social networking sites and the internet as whole.

Psychographic: This refers to the personality traits and the lifestyle traits of the people of your target area. This means that if your target is an area where the population is not too rich or does not have a broad outlook, then you cannot even think of selling an expensive item over there.

Demographic: Demography refers to the population. Thus, when you consider it as the part of defining a market segment, it refers to the characteristics of the population. The points to be included here is the age group that you wish to target, the gender of most of the people and if there is a balance between them, the socio-economic class that exists there and also whether the area is densely populated or sparsely populated. All these will help you to reach out better to the masses. It is obvious that what will suit one age group or gender, may not be lucrative for the others. This is why you need to plan your actions and activities accordingly.

Behavioral: Lastly, the first step of your market segmentation will be successfully over after you have observed and made a deep study of the behavior of the people. This means that you must know whether there is brand loyalty in the people of if they already have another preference. This will help you to crack the deal and may way to their hearts as well as their homes. The usage rate of items must also be examined so that you can estimate the profit that you are going to make and the pace at which you will be able to recover the investment that you have made.